' AJMAL MIAN, J.-- By this common judgment we intend to dispose of above petitions. The petitioners have impugned the orders passed by respondents Nos. 1 to 3.
' The brief facts leading to the filing of the above petitions are that under L.C. No, 7391 opened on 19th October, 1973 terry towels, numbering 11,50,000 were to be exported from Pakistan to U.S.S.R.
The above letter of credit was irrevocable in favour of Messrs Gulco Trading Limited, Karachi, who were the agent of Messrs Exportljon, Moscow. It seems that against the above L.C. the above petitioners filed applications for the export of various quantities of terry towels. The detail of the same is as follows:- Const. Petition No.Date of export applicationNo. of terry towelsDate of demand notice issued by the respondent 1 2 3 4 1387/7928-12-1973 2-3-1974 2-3-197453220 PCs 27-7-1974 1135/7920-12-1973 1-1-1974136500 PCs 27-7-1974 1136/79 18-1-1974 7000 PCs 27-7-1974 1137/79 22-12-1973 28100 PCs 27-7-1974 1138/793-1-1974 8-1-1974 9-1-1974 1-3-1974296550 PCs 27-7-1974 1139/7928-12-1973 2-3-1974 2-3-197420250 PCs 27-7-1974 1140/79 31-1-1974 15000 PCs 27-7-1974 1141/79 31-1-1974 52244 PCs 27-7-1974 1142/7920-12-1973 31-1-197435100 PCs 27-7-1974 1143/79 31-1-1974 19800 PCs 27-7-1974 1144/79 31-1-1974 46700 PCs 27-7-1974 1614/7931-12-1973 19-1-197475500 PCs 27-7-1974 1651/79 15-1-1974 60300 PCs 27-7-1974 1652/79 15-1-1974 19100 PCs 27-7-1974 1653/79 31-1-1974 15000 PCs 27-7-1974 1707/798-1-1974 21-2-1974177150 PCs 27-7-1974 2065/7921-12-1973 31-1-197478300 PCs 27-7-1974 2066/79 1-3-1974 22500 PCs 27-7-1974 2067/79 19-1-1974 74800 PCs 27-7-1974 ' It further seems that prior to the filing of the above application by the petitioners, the Ministry of Finance, Planning and Development issued SRO No,1525(1)/73, imposing 15% regulatory duty inter alia on the towels for export. It further seems that the Superintendent of Custom at Chaman allowed the export of the petitioners' various consign ments of towels without charging any export regulatory duty. It may also be stated' that the Ministry of Finance, Planning and Development Division issued SRO No, 537(1)/74, dated 29th April, 1974 exempting from the payment of the above regulatory duty of 15% inter alia on finish cotton towels in respect of which the contracts were entered into for export and for which confirmed irrevocable letters of credits were opened before 25th October, 1973. It also seems that the Superintendent Land Custom issued notices referred to hereinabove to each of the petitioner calling upon them to pay the sum mentioned therein being the alleged regulatory duty of 15% on each of the above consignments. The above notices were followed by show-cause notices. The petitioners had replied to the above notices averring therein that they were not liable to pay any amount. However, respondent No,1 through his various orders referred to here in below maintained the above demand notices and directed the petitioners to pay the sums mentioned therein. The petitioners being aggrieved by the above orders filed appeals which were dismissed by respondent No,2 through the various orders referred to hereinbelow. The revisions filed by the petitioners were also dismissed by respondent No,3. The details of the orders passed by respondents Nos. 1 to 3 are as under:- Petition Number.Date of Collector order.Date oforder of Board of Revenue.Date of order of Secretary Ministry of Finance.
1 2 3 4 1387/79 10-5-1975 29-3-1977 10-4-1979 1135/79 10-5-1975 31-3-1977 10-4-1979 1136/79 10-5-1975 31-3-1977 10-4-1979 1137/79 10-5-1975 29-3-1977 10-4-1979 1138/79 10-5-1975 31-3-1977 10-4-1979 1139/79 10-5-1975 29-3-1977 10-4-1979 1140/79 10-5-1975 31-3-1977 10-4-1979 1141/79 10-5-1975 31-3-1977 10-4-1979 1142/79 26-4-1975 31-3-1977 10-4-1979 1143/79 10-5-1975 29-3-1977 10-4-1979 1144/79 10-5-1975 31-3-1977 10-4-1979 1614/79 10-5-1975 29-3-1977 22-3-1978 1651/79 10-5-1975 31-3-1977 10-4-1979 1652/79 10-5-1975 31-3-1977 10-4-1979 1653/79 10-5-1975 31-3-1977 10-4-1979 1707/79 10-5-1975 31-3-1977 10-4-1979 2065/79 10-5-1975 31-3-1977 10-4-1979 2066/79 10-5-1975 31-3-1977 10-4-197.9 2067/79 10-5-1975 29-3-1977 10-4-1979 The petitioners being aggrieved by the above orders have filed the present petitions.
3. In support of the above petitions Mr. Sajid Ali learned counsel for the petitioners has contended as under:-
(i) That by virtue of subsection (3) of section 32 of the Custom Act the impugned demands of the respondents were barred by time.
(ii) That since the Government of Pakistan in any case exempted the terry towels from the payment of the regulatory duty under SRO, dated 29th April, 1974 in respect of which contracts were already entered into and confirmed irrevocable letters of credit were opened before 29th April, 1973, the demands of the respondents even on merits were not warranted by law. On the other hand Mr. Nazir Haider learned counsel for the respondents has urged as follows:-
(i) That there was misrepresentation on the part of the petitioners in their applications for the export of the consignments and, therefore, the relevant provision is subsection (2) of section 32 and not subsection (3).
(ii) That factually there was no irrevocable confirmed L.C. in respect of consignments on a date prior to 25th October, 1973.
4. It may be pertinent to quote the endorsement on the applications forms, which according to Mr. Nazir Haider constitutes misrepresentation on the part of each of the petitioners, which reads as follows:- "Free, as the consignment is covered by genuine contract covered by firm irrevocable L.C. of a date (19-10-1973) prior to the date of the Notification levying Export Duty (25-10-1973)."
' It may be observed that this4endorsement in the application form is in the column which was to be filled in by the Customs Department. This has been urged by the learned counsel for the petitioners that factually this column endorsement was of the Custom Department and not of the petitioners, Even if we hold that the above endorsement is of the petitioners, we are inclined to hold that the same would not constitute a misrepresentation as it is an admitted position that the above consign ments were exported against an irrevocable confirmed L.C., dated 19th October, 1973. However, it was urged by Mr. Nazir Haider learned counsel for the respondents that the above original L.C. was in favour of M/s. Gulco Trading Limited and the same was splatted in order to enable a number of suppliers including the petitioners to export the terry towels against the above L.C. and, therefore, it is the date of splitting of the L.C. which would be material date.
5. The question in issue is whether the endorsement as stands can be construed as a representation of fact as to attract the application of subsection (2) of section 32 of the Customs Act. It may be pertinent to refer subsections (1), (2) and (3) of section 32 of the Customs Act which reads as follows:- "(1) If any person, in connection with any matter of customs,--
(a) makes or signs or causes to be made or signed, or delivers or causes to be delivered to an officer of customs any declaration, notice, certificate or other document whatsoever, or
(b) makes any statement in answer to any question put to him by an officer of customs which he is required by or under this Act to answer and such document or statement is untrue in any material particular, he shall be guilty of an offence under this section.
(2) Where, by reason of any such document or statement as aforesaid or by reason of some collusion, any duty or charge has not been levied or has been short levied or has been erroneously refunded, the person liable to pay any amount on that account shall be served with a notice within three years or the relevant date, requiring him to show cause why he should not pay the amount specified in the notice.
(3) Where, by reason of any inadvertence, error or misconstruction, any duty or has been short levied or has been erroneously refunded, the person liable to pay any amount on that account shall be served with a notice within four months of the relevant date requiring him to show cause why he should not pay the amount specified in the notice."
6. It may be noted that subsection (1) of section 32 provides that if any person knowing or having reason to believe that the document or the statement which he has made in any material particular is false, he will be guilty of an offence under the section. It may be pointed out that the words "knowing or having reason to believe" were added by Ordinance No, XXVII of 1981. It may further be noted that subsection (2) provides that where, by reason of any document or statement referred to in subsection (1) or by reasons of some collusion on the part of the custom official and the person liable to pay duty, any duty or charge has not been levied or has bee41 short levied or has been erroneously refunded, the person can be served with a notice within a period of three years from the relevant date. It may further be noted that subsection (3) provides that whereby reason of any advertence, error or misconstruction any duty or charge has not been levied or has been short levied or has been erroneously refunded, the person liable to pay any amount shall be served with a notice within six months of the relevant date calling upon him to show cause against the payment. It may be pointed out that by Ordinance No, XII of 1982, the period of six months was substituted in place of four months. In the present cases as the applications were filed in 1974 the period applicable would be four months, in case we hold that subsection (3) of section 32 is applicable.
7. The point of controversy, is, as to whether in the present ease subsection (2) of section 32 is applicable or whether the pertinent subsection is subsection (3) which at the relevant time provided four months period. It is however an admitted position that the Superintendent Land Custom at Chaman construed the notification, dated 25th October, 1973 as a notification not applicable to the consignments which were covered by irrevocable L.C. of a date prior to the date of the above notification. The respondents have not alleged any collusion on the part of petitioners and the above custom official in order to press into service subsection (2) of section 32. It may again be observed that the above endorsement is mentioned in the column which was intended to be filled in by the Customs Department. In our view, it was a case of misconstruction or inadvertence and, therefore, the case is covered by subsection (3) of section 32. The demand notices admittedly were issued after the expiry of more than four months from the date of export.
We, therefore, are of the view that the impugned demands are hit by subsection (3) of section 32 of the above Act. We, therefore, allow the petitions on the above ground and declare the impugned orders as being without lawful authority and of no legal effect. The respondents are refrained from implementing the same. There will be no order as to costs.